Editorial: Restore Faith in Finmeccanica

Nov. 6, 2012 - 07:38PM
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For the past two years, Italy’s Finmeccanica has been buffeted by allegations of impropriety and corruption, wounding the defense giant.

Former CEO Pierfrancesco Guarguaglini was forced out in 2011 amid a corruption probe focused on Selex Sistemi Integrati, a Finmeccanica unit headed by Guarguaglini’s wife.

Guarguaglini and Finmeccanica denied wrongdoing, but that did not put an end to the investigations.

New allegations have emerged about possible kickbacks, or demands for kickbacks, implicating former government officials and company executives on deals with Panama, Brazil and India.

Magistrates are investigating Finmeccanica CEO Giuseppe Orsi in connection with an alleged kickback on a 560 million-euro ($719.6 million) deal to sell AW101 helicopters to India in 2010. Orsi led Agusta-Westland, a Finmeccanica subsidiary, at the time.

He and Finmeccanica have denied wrongdoing, but investigations are clouding the company’s future as it works to stem losses, address shrinking U.S. and European markets and position itself strategically.

This is where Italian government leaders must step in. By failing to indicate either confidence in Orsi or a desire that he step aside for the good of the company, Treasury Minister Vittorio Grilli and Industry Minister Corrado Passera have instead chosen to leave Orsi — and the company — hanging.

They cannot have it both ways. Grilli and Passera must move quickly to either back Orsi or install a new leader who also moves quickly to hold accountable those responsible for wrongdoing while restoring confidence in a company critical to Italy and the global defense economy — before it’s too late.